Event: Jennifer Westacott interview with Neil Mitchell, 3AW Mornings
Speakers: Neil Mitchell, host 3AW Mornings; Jennifer Westacott, chief executive Business Council of Australia
Topics: Paid parental leave; the Business Council of Australia’s 2021 budget submission

E&OE

Neil Mitchell, host 3AW: Apologies for that she dropped out. Talking about parental leave the Business Council of Australia wants to extend it to men and women. Jennifer Westacott good morning again.

Jennifer Westacott chief executive Business Council of Australia: Good morning. Can you hear me?

Neil: Yeah I can. Sorry about that don't know what happened.

Jennifer: That's okay.

Neil: Why would I as a taxpayer fund it at an extended level?

Jennifer: Well we need to make it easier for families to work and have kids Neil. I think that's the bottom line. We need all Australians now really participating in work. So that's some of our childcare changes. At the moment you get 20 weeks and that's split between 18 for the primary carer which is normally the woman and two weeks for the other carer. What we're saying is over 8 years we go to 26. We think that can be shared equally between the primary carer and the other carer. And that means that households are deciding, or how families are deciding are going to do this not government. But this is really important that we make it easy for people to work and have kids. And particularly for small and medium businesses.

Neil: So you're going to six months leave and it can be split so it’s three months each?

Jennifer: Yeah.

Neil: Okay, and I've got to fund it. Why is it, and I'll be selfish, what is the benefit for me? What's in it for me?

Jennifer: Because what's in it for you is that we have got more people working, they're paying more tax, they're able to work, they're able to have kids, if government gets more tax revenue they're able to pay for more services, and it means we're not so reliant on bringing migrants in to do important jobs in Australia. It means that we're giving Australians those jobs and we're making it easier for families to work and have their kids.

Neil: So are the jobs there? I mean who's filling those jobs at the moment that people aren't filling because they're at home with the kids?

Jennifer: Oh there's lots of jobs Neil. There are lots of jobs, particularly and this goes to childcare, there are many jobs which women don't do because...

Neil: But broader than that. You're saying that by giving childcare, six months childcare...

Jennifer: No that's paid parental leave.

Neil: Sorry paid parental leave, you're going to get more people into work. What jobs are they taking?

Jennifer: Those jobs will be in retail. Those jobs will be in administration. Those jobs will be across the whole economy.

Neil: Who's filling them at the moment?

Jennifer: Well at the moment we're doing a lot of those jobs, prior to COVID obviously, I mean these are all post-COVID, but a lot of those jobs say people working in nursing homes, for example, were filled by foreign workers. Now those are jobs...

Neil: So we send the foreign workers home?

Jennifer: Well a lot of those people obviously are on temporary visas and a lot of them haven't come during COVID. But we need to make sure that we can fill jobs with Australians Neil and make it easier for families to work and have their kids. And at the moment it's really tough on people, particularly in childcare.

Neil: So how does the increased tax come in? Because we've already got people in those jobs who are paying tax?

Jennifer: Yeah sure they're paying tax but surely our first priority is to give Australians those opportunities and to ensure that Australian families are able to have their kids, work, share that equally amongst them, not have government tell them how to organise their lives. But in childcare we have a lot of women who want to get back to work, who want to work and in the childcare system, you've got these big cliffs in the system that mean it costs you more to go to work than it does to stay at home. That’s not good, we want people working.

Neil: So you want that subsidised as well, greater subsidy?

Jennifer: Yeah we want to lift that for low-income earners. We want them to be able to get a 95 per cent full subsidy from government. For people under $80,000. We want to lift that to $450,000, the cap. And we want to make sure that the current system which is basically lots of cliffs that as you start earning more money you get to a point where it's basically not worth it to go to work then it's easier to stay working, keep your kids in childcare. This is all about making it easier for families to work and have their kids and to make sure that we've got as many people, particularly women who were very hard hit by COVID back into work.

Neil: I understand the appeal of all that but out in the real world most of us are sick of paying absurd amounts of tax. And this certainly wouldn't go to reducing the tax bill and possibly increasing it. What's it going to cost?

Jennifer: Well I think a lot of people are really tired of paying a really high childcare fee and paying tax.

Neil: Of course they are.

Jennifer: I think they feel that they're working really hard, they're not getting ahead, their childcare bill makes it almost pointless to for them to go to work, they want to work. We've basically got to get everybody participating in the economy Neil. And that means we're going to have more revenue coming into government, more people spending.

Neil: I fail to see this revenue. You say there'd be increased tax coming in, but the people would be taking jobs that are already filled. So those people in those jobs are already paying tax.

Jennifer: Sure but we absolutely have to have - surely our first priority is to give Australians to working...

Neil: That's a different argument. I'm looking at the tax argument. You're saying there will be more tax coming in because they'll be going into these jobs which other people already fill and already pay tax. So how do we get more tax?

Jennifer: More people working increases economic activity, increases revenues to government, increases the amount of people...

Neil: How are we getting more people working if they're taking jobs that already exist?

Jennifer: But we want to add to jobs. We want to get more jobs going. That's the other side of our budget submission. We need to see investment going up so more jobs are created. We want to see more jobs, higher paid jobs, we want to see better jobs for Australians. But this is really about family fairness Neil. This is about making it easier for people to work and have their kids. It's about making sure that women are able to work and don't feel that it's pointless going to work. And that's really important. And all of the economic analysis says if you've got more women working the economy would grow quite substantially and when the economy grows we're all better off.

Neil: If you put together the parental leave and the increased subsidy for childcare, what's the overall cost?

Jennifer: Well the childcare one is about $2.5 billion a year and the return based on KPMG's estimates is about $5 billion. The paid parental leave is a lot more complex to put a cost in because it depends on how people share it and it's over eight years.

Neil: Okay. Have we got a ballpark figure or not?

Jennifer: Not really because it will really depend on how that's taken up by people whereas childcare we know the current rates, we know the level of subsidy, we can make that cost estimate easily. But I just come back to this point Neil, this is about families in Australia getting a better deal, women being able to get back to work, making it easier for people to work and have their kids.

Neil: Okay thank you very much.